Sonoma County home sales last month rose to their highest level in nearly two years, but buyers still must contend with high prices and low inventory.
The median single-family price in June hit $627,000, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws. The median price increased nearly 5 percent from a year earlier and remains close to its March record peak of $635,000.
Meanwhile, the Bay Area’s median home price last month hit a record $908,700, according to the California Association of Realtors.
The organization said Tuesday that roughly one in four families in the nine-county region could afford such a home.
The high prices already have caused residents to leave California for states with lower home prices, said Leslie Appleton-Young, the association’s chief economist.
“We’re seeing an acceleration of outmigration because of housing,” she said.
County home buyers purchased 501 single-family houses in June, the largest number for any month since July 2015. However, the results appear to analysts to be a brief correction from a slow winter and spring rather than a sign of a housing market on the upswing.
Sales may have taken a bounce last month, but it still amounts to “bouncing on the bottom,” said Mike Kelly, an agent with Keller Williams Realty in Santa Rosa. Home sales have fallen for three of the past four years.
The county’s housing market continues to be characterized by rising prices, declining sales and tight inventory.
Home prices here have climbed for more than five years.
The increases occurred after median prices plummeted in the midst of a national housing crisis and Great Recession, hitting a low here of $305,000 in February 2009.
Prices began to rise in 2012. The county in March surpassed its previous record median price — not adjusted for inflation — of $619,000 set in August 2005.
Purchasing a home in the region today requires considerable savings and income.
The buyer of a median-priced home in the Bay Area would need to put down roughly $105,000 for a 10 percent down payment and closing costs, said Scott Sheldon, branch manager at New American Funding in Santa Rosa. With a 30-year fixed loan at 4.375 percent, the mortgage would require monthly payments, including taxes and insurance, of $5,435, and the buyer would need a household income of $152,000 a year.
The real estate association estimated Tuesday that only 25 percent of county households and only 21 percent of Bay Area households could afford the respectively median-priced homes in June.
For the county’s median-price property, a buyer with 20 percent down would need a minimum income of $123,527 in order to afford monthly payments of $3,088, the association calculated. June ended with fewer than 830 single-family homes available for sale in the county, or less than two months of inventory at the current pace of sales.
For the first six months of the year, the number of newly listed properties for sale declined 5 percent from the same period in 2016 and amounted to the lowest total in at least eight years.
With such a limited supply of homes, buyers must be ready to make their best offer when a new property becomes available, agents and brokers said.
“As soon as those listing come on, you have to move,” said David Corbin, broker with HomeSmart Advantage Realty in Santa Rosa.
“You can’t wait a day or two.”
Sellers, meanwhile, continue to draw strong interest from buyers in many price segments, agents said.
Multiple offers are common for houses selling below $550,000, and sales have increased significantly for homes selling above $1 million.
Trish McCall, an agent with Keller Williams Realty in Santa Rosa, said interest remains strong for move-up homes, especially single-story houses with about 1,800 to 2,100 square feet of space and situated on larger lots in nice neighborhoods.
Such homes appeal both to families on the hunt for more room and to affluent empty nesters looking to downsize from even larger properties.
Last month McCall listed two such homes next door to one other in northeast Santa Rosa, each priced in the $800,000s.
After crowded open houses, “they both were in contract within 12 hours,” she said. The accepted offers for both properties exceeded the asking prices.
Belinda Andrews, a broker associate with Century 21 in Santa Rosa, said she talks regularly with young people who question whether they can afford to remain in Sonoma County.
Some put down roots, others work here but commute in from outside the county and still others leave.
As both rents and home prices continue to rise, Andrews said, more residents inevitably will ask, “Is living in this area worth it? I think a lot of people are going to say, ‘No, it’s not worth it.’ ”
You can reach Staff Writer Robert Digitale at 707-521-5285 or firstname.lastname@example.org. On Twitter @rdigit